P&O Nedlloyd may attract counter bids

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The Independent Online

Speculation over a bidding battle for P&O Nedlloyd intensified yesterday as AP Moeller Maersk, the world's biggest container shipping group, unveiled a $3bn (£1.6bn) offer for the company.

Industry sources said three or four rival shipping groups could choose to throw their hats into the ring to prevent the giant Danish company dominating the global container shipping industry.

Amongst those mentioned were the Geneva-based Mediterranean Shipping Company (MSC), currently the world's second-biggest container group, Orient Overseas Container Line of Hong Kong, China Shipping and the Singapore-based Neptune Orient Line, owned by the state-backed Temasek group.

The Maersk offer is pitched at a 40 per cent premium to P&O Nedlloyd's closing price on Monday, the day before the Danes confirmed they were in takeover talks, and has been recommended as "full and fair" by the board of the Anglo-Dutch company. Shares in P&O Nedlloyd closed 12 per cent higher last night at €56.75 - just short of the €57 offered by Maersk.

Philip Green, the chief executive of P&O Nedlloyd, said a rival bid was "possible but unlikely", pointing to the large premium the Danes are offering.

However, another executive close to the deal said: "I wouldn't dismiss a rival offer. This deal would make Maersk three times bigger than its nearest competitor and that is bound to give a few other shipping companies pause for thought."

Mr Green confirmed there would be a "break fee" written into the formal offer document in the event that P&O Nedlloyd chose to accept a rival offer. He declined to say how big it would be but said it would not be material in the context of a $3bn deal.

A combination of Maersk and P&O Nedlloyd would create a business with 17 per cent of the global container market. The next biggest operator, MSC, has 6 per cent. Maersk said the takeover would lead to 1,500 job losses over three years from the combined workforce of 30,000 but said it hoped to achieve these largely through natural staff turnover and voluntary redundancies. P&O Nedlloyd's London headquarters will close but Maersk will retain a strong presence in London and Rotterdam.

P&O, which has a 25 per cent shareholding in P&O Nedlloyd, will receive £396m from the sale of its stake. It said the proceeds would be used to pay down debt and expand its container ports division.